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Land & Buildings quadruples stake in HCP in Q2, buys back into Mack-Cali

Land & Buildings Investment Management LLC's biggest moves of the quarter came in HCP Inc. and Mack-Cali Realty Corp., according to the firm's most recent investor filing.

The activist investor, led by industry veteran Jonathan Litt, re-initiated its stake in Mack-Cali during the second quarter, buying 678,219 shares of the office-focused REIT after selling off its 599,532-share position the quarter prior.

Mack-Cali recently faced a proxy battle with New York-based investment firm Bow Street, which brought about the shuffling of four positions on the REIT's board of directors. In addition, Mack-Cali recently announced its intention to form a committee of independent directors to explore available options for maximizing shareholder value, including a potential sale of the company or certain assets.

Litt, who previously held a seat on the REIT's board, was reported about a year ago to be pressing Mack-Cali to consider possible changes, including a full or partial sale of the company.

Land & Buildings' largest increase during the quarter came in healthcare REIT HCP, in which the firm boosted its share count by more than 4x to 970,600 — a holding worth $31 million on June 30.

Regional mall REIT Taubman Centers Inc. remained the firm's largest holding by market value at quarter-end, at $45.5 million. Land & Buildings ended the period with the same 1.1 million shares that it held at the end of the first quarter.

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Land & Buildings increased its share count in seniors housing operator Brookdale Senior Living Inc. by 49.1% during the quarter, bringing its total stake to more than 3%.

The firm recently nominated James Flaherty III, former CEO and chairman of HCP, and Litt for election to Brookdale's board at its upcoming annual stockholder meeting. In an open letter to Brookdale shareholders, Litt called upon the company to evaluate strategic alternatives to maximize the value of its real estate assets, including spinning off its real estate assets into a separate public REIT, referencing data from real estate research and advisory firm Green Street Advisors indicating that Brookdale was trading substantially below net asset value.

Land & Buildings also increased its position in casino REIT MGM Growth Properties LLC by 47.5% during the quarter, bringing its total share count to 566,000 at quarter-end.

While Land & Buildings continued to hold stakes in all its positions from the quarter prior, the investment firm lowered its share count in nine of them. The firm's largest decrease was in hotel operator Marriott International Inc., where Litt was reported in March to be seeking a board seat and calling for the company to trim its brand portfolio.

Land & Buildings also reduced its stake in single family-rental REIT American Homes 4 Rent by 41% to 465,900 shares and dropped its share count in Cushman & Wakefield PLC and Equity Residential by 27.4% and 21.5%, respectively.

As of June 30, Land & Buildings held investments in 16 publicly traded companies, valued at $404.1 million in total at quarter-end. Its holdings in casino and gaming companies aggregated to $77 million, the firm's largest exposure of any property sector. Land & Buildings' holdings in the healthcare sector followed at $71.9 million.

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